Sensex Drops 610 Points as Crude Tops $100
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- Sensex dropped over 610 points to 73,952 and Nifty 50 fell 183 points to 22,968, with the selloff erasing nearly Rs 5 lakh crore from BSE's total market capitalization to ~Rs 425 lakh crore; this follows an ~8% crash last week
- Brent crude traded at $104.7/barrel and WTI at $99.45 as Trump threatened further strikes on Iran's Kharg Island oil export hub and said he is 'not ready to reach a deal' to end the conflict
- Trump said the US is in talks with seven countries to help secure the Strait of Hormuz, which Iran has largely blocked to oil tanker traffic and through which over 20% of the world's oil and gas shipments pass
- Indian rupee traded at 92.4650 against the US dollar, within touching distance of its lifetime low of 92.4750 hit last week, as the safe-haven dollar strengthened on geopolitical tensions
- Foreign Institutional Investors extended their selling streak to 11 consecutive sessions, net selling Indian equities worth around Rs 68 lakh crore cumulatively, including Rs 10,717 crore on Friday alone
- Kayanat Chainwala of Kotak Securities warned crude could hit $120/barrel short-term and $150 if the war extends beyond a month, while Motilal Oswal said a $10/bbl oil rise could add 30-50bp to inflation given India's 80% energy import dependence
Why it matters: India imports 80% of its energy, so a sustained $10/bbl rise in crude could add 30-50bp to inflation and push CPI toward 5%, while 11 straight sessions of FII selling (Rs 68 lakh crore cumulatively) shows foreign capital is voting with its feet on the war's duration risk.
